Next cheers both market and investors with special dividend

Friday, 06 February 2015

Next cheered both market and investors on Thursday with the announcement of an special dividend of 50 pence per share. On the wake of the announcement, the stock reached 7,125 pence a piece, what implies a 16 percent surplus year-on-year.

As highlighted by ‘The Motley Fool’, Next´s closing price represents a share price gain of 273 percent, compared to the London benchmark index FTSE 100’s 35 percent.

The British retailer explained in a note that the payment is in line with its well-established policy of returning surplus cash to shareholders via share buybacks or special dividends.

In the same vein, the company reminded that it set an upper limit for share buybacks of 67 pounds per share. Since then, Next’s share price has remained above that level, and the company has therefore been unable to implement any buybacks.

Thus, Next Thursday announced that it will be paying a further special dividend of 60 pence per share on May, 1, with an ex-dividend date of 10 April.

As explained by the retailer, the 20 percent increase in the special dividend, from 50 pence to 60 pence, reflects the company’s expectations for cash flow during 2015, but that it does not indicate current trading performance. Next says that it remains “cautious” and that it’s not currently changing either its profit guidance or share buyback limit.

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